Stop Price Gouging Practices of Prescription Medication

High prices on brand name or newer drugs has become a social norm since profits account for paying off the research that went into the drug, however, over the few years a new problem has arisen with generic and older drug costs due to two causes: lack of price regulation and rapidly declining competition in the generic and older drug industry. The question of whether the government should or should not regulate drug prices has been up for debate for a countless number of years.

Currently, the pharmaceutical industry has a stronghold on congress and this keeps regulations from being proposed. The Center of Public Integrity on February 11, 2013 reported, “…the pharmaceutical industry has forked over a total of $2.6 billion on lobbying activities from 1998 through 2012, which is $1.2 billion more than that of the oil and gas companies.” That’s a lot of influence. By having this much control on the nation’s government, further strengthens the monopoly, boosts profit rates, and allows pharmaceutical companies to act like a business.

With no regulations in place, this caused consolidation to occur, which decreased competition within the industry, especially for the generic and older drugs markets. Since the enactment of the Hatch-Waxman Act in 1984, pharmaceutical companies that produce generic drugs did not have to follow the strict and long process of having to be approved by the Food and Drug Administration, FDA, they could simply begin to make a generic version of a brand named medication after its patent expired. For a long period of time this opened up the generic drug industry to many small and new pharmaceutical companies, which allowed generics to have their low and affordable prices. HealthAffiars.org writes on February 23, 2016, “Generic drugs used to cost less when 10 or more companies entered the market. But this trend has recently reversed for older drugs since suppliers have dwindled down to two or three.” With fewer companies in the industry, this lead to less competition; less competition means higher prices go unchallenged; and this can only bring us back to Pharma-bro and Heather Bresch because by Turing Pharmaceuticals and Mylan Pharmaceuticals buying the rights of half century year old drugs, they are actively participating in consolidating the drug industry.

Having identified the causes of how prices on usually affordable drugs have risen, let’s analyze the effects it has on patients today and the drug industry itself. An ABC news article on November 21, 2014 summarized a hearing of the Senate subcommittee on public health and aging, which announced, “The prices of more than 1,200 generic medications increased an average of 448 percent between July 2013 and July 2014.” I’m going to let that linger for a minute. In one year’s time, over a thousand medications increased over 400%. Some examples of these types of incidents are: Isuprel and Nitropress, two heart medications that after being obtained by Marathon Pharmaceuticals in 2013 had an increases of 525 percent and 212 percent and Cycloserine, a drug to combat against tuberculosis had an increase from 500 dollars for a month's supply to 10,800 dollars after the drug was bought by Rodelis Therapeutics in August of 2015. Companies are banking on the misery and suffering of others. What we see here, is a trend that unfortunately appears to be the future of an already profit-driven industry.

By finding a new way to make an easier profit, less innovation takes place, which lead to companies losing their relationship wither customers. Innovationfiles.org on January 8th, 2015 describes, “If companies have incentives that outweigh the long process that it takes to develop any kind of new drug, then they will not invest in researching new drugs and bringing them to the market.” It has become cheaper for pharmaceutical companies to pay millions for the rights of generic and older drugs than it is to invest billions to create better or new versions of a drug. The National Bureau of Economic Research, after doing an investigation on advancements in the generic drug industry in 2014, found that the innovation on generic drugs had declined. This lack of innovation displays the speedy evolution of pharmaceutical companies becoming more business oriented and more worried about making money than caring about the financial and health issues of their consumers.